How to spend a billion: Obama will lavish on ads

Then Democratic presidential nominee Senator Barack Obama (D-IL) makes his case for being elected president in this frame grab from a 30-minute infomercial-style address released October 29, 2008.
REUTERS/Obama For President Campaign/Handout

U.S. President Barack Obama's campaign will lay out a huge amount of money to try to ensure he wins re-election in 2012, with many estimating that he will raise a record $1 billion.

But abandon romantic notions that the cash will go mostly to connect with voters at breakfasts in Iowa cafes, open houses in New Hampshire, or through innovative Internet communication schemes.

The 2012 re-election team will run through its war chest mostly by buying massive amounts of advertising on radio and TV.

Obama's team spent $427 million on media out of the unprecedented $760 million it raised when he first won the White House in 2008, according to the Center for Responsive Politics' OpenSecrets.org website.

This time analysts forecast hundreds of millions of dollars in advertising spending again, boosting revenues of a range of U.S. media companies, including major television and radio networks.

And, although much was made of Obama's successful use of email and other social media when he won in 2008, the U.S. election battle was still largely waged in traditional outlets.

The 2008 campaign spent $244.4 million on broadcast advertising; $133.2 million on miscellaneous media, mostly to a messaging and consulting firm; $26.6 million on Internet media, and $20.5 million on print, according to OpenSecrets.

"If you just annualize their last four months of TV and radio spending (in 2008), they were the fourth largest advertiser in America on those traditional media," said Evan Tracey, president of the Washington area Campaign Media Analysis Group, which analyzes campaign spending.

Obama announced on Monday he will be a candidate for 2012, getting a jump on Republicans, who are still in the early stages of choosing a candidate. Most polls show the president ahead of any Republican rival, although it is still very early.

A WIDE REACH

A $1-billion war chest would allow Obama's 2012 campaign to advertise on television, radio and newspapers in almost any market it wants to, rather than pick and choose the cities and states in which it spends its money.

The campaign would be able to buy advertising targeting specific groups, such as Hispanic or urban voters, and produce and air its own messages, along the lines of the 30-minute prime-time program starring Obama that aired days before the November 4 election in 2008.

The cost of that program was estimated at close to $1 million for each of its three major network slots, and reflected the huge cash advantage Obama had as he defeated the Republican presidential nominee, Senator John McCain.

"That kind of money, it basically gives them the ability to use any and all channels," Tracey said. "It's the kind of money that allows them to create basically their own content."

After media, administrative costs consume the biggest piece of campaign cash. Obama 2008 spent $60.8 million on travel, $58.8 million on salaries and benefits and a whopping $16.8 million on postage and shipping, according to OpenSecrets.

Rent consumed $10.6 million, and food and meetings a relatively paltry $437,144, the group said.

An umbrella grouping of campaign expenses totaled $73.7 million, including $32.0 million for campaign events, $28 million for polling and $110,000 for campaign direct mail.

Contributions to federal and non-federal parties, candidate committees and other political groupings totaled $45.9 million for Obama 2008, OpenSecrets said.

(Editing by Alistair Bell and Vicki Allen)

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